Recreation: Get Out

State audit faults Colorado health department handling of medical pot

A marijuana plant in flower appears at an indoor medical marijuana grow on March 19, 2013, in Denver. (Joe Amon, The Denver Post)

State auditors examining the Colorado Department of Public Health and Environment's role as gatekeeper to medical marijuana use found lax regulation of physicians, unnecessarily high patient fees and a failure to oversee caregivers.

An audit released Monday is the second rebuke in recent months of Colorado's efforts to oversee medical marijuana.

In March, auditors came down even harder on the Department of Revenue division charged with regulating medical pot businesses, finding wasteful spending and incomplete enforcement.

Oversight of medical marijuana in Colorado falls to two state agencies. The Marijuana Enforcement Division, part of the Department of Revenue, regulates dispensaries, grow locations and infused-products manufacturers. The health department is responsible for maintaining the patient registry, among other roles.

The registry is expected to shrink considerably once recreational pot shops open early next year, a consequence of voter-approved Amendment 64 last November. The numbers have begun to dwindle in recent months, with 105,886 patients as of May 31, down from 108,656 in January.

The audit Monday found evidence the health department does not sufficiently oversee doctors who give patients recommendations needed to get medical marijuana.

One doctor provided recommendations for more than 8,400 patients. Some doctors showed a penchant for recommending plant counts far above the standard of six plants per patient, which can be exceeded if medically justified. One physician recommended 501 plants for a single patient.

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The audit found the department did not take full advantage of enforcement steps, including referring doctors to the Colorado Medical Board or holding hearings if doctors are suspected of improper financial ties to medical marijuana businesses.

The department referred concerns about five doctors to the medical board for investigation in 2011 — the last year it has done so. Karin McGowan, interim director of the health department, suggested at a legislative committee hearing it was a challenging issue.

"I think it is difficult to determine whether people who have high patient counts have just specialized in that area or are doing something inappropriate," she said. "It is hard to tell."

The medical board has taken final agency action against two doctors who were referred by the health department, a spokeswoman said. Both were put on five-year probation for violations including failing to properly evaluate patients.

The audit also found little departmental oversight of caregivers, a little-tracked component to the medical marijuana system. Caregivers are supposed to take significant responsibility for managing patients' well-being, not just supply them with marijuana.

Of 5,400 registered caregivers, auditors identified 52 who exceeded a five-patient limit and some operating substantial grow operations, raising the question of whether they are operating as marijuana businesses. Waivers to the patient limit are available but auditors raised concerns about them.

Auditors also flagged the department for charging patients too much for application fees. By the end of fiscal year 2012, it had built up excess reserves of more than $11.3 million with the fees. The large reserves have put the department out of compliance with a statutory limit on such funds since 2004.

McGowan said the state Board of Health discussed eliminating the fee altogether but was concerned about lower barriers inviting fraud. Fees have been reduced over the years, most recently to $35.

The department agreed to numerous steps as a result of the audit, including seeking more patient information from doctors, asking caregivers to more fully account for their services and revisiting its fees.

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